SaaS Interviews with CEOs, Startups, Founders
1573 How Activtrak Hit $4.5M ARR With No Outside Capital
14 Nov 2019
Chapter 1: What is ActiveTrack and how did it start?
Founded ActiveTrack, free employee monitoring software and productivity measurement. That was back many years ago. Call it, let's see, 2011. Now 27 people based mostly in Dallas, Texas. 4,400 customers paying on average 85 bucks a month. So doing 378 grand per month right now. That's up from 245 grand just a year ago. They've done this all bootstrapped, which is great.
2% gross revenue churn per month, 3% expansion, so net negative 1% revenue churn every single month. That's obviously great. Too early, or they don't really track CAC right now because a lot of their growth is coming just from organically and their team of sales and marketing. Hello, everybody. My guest today Today is Anton Zeidler.
He's 35 years old, married with two kids, living in Dallas, Texas, building a SaaS, building SaaS B2B products since 2003.
Chapter 2: How has ActiveTrack achieved $4.5M ARR without outside capital?
His first startup grew from one to 110 employees and zero to 2 million bucks per year in four years. Second one to 4.6 million ARR in six years. His areas of expertise, product marketing, UI UX, building teams in early stages of startups, now building a company called ActiveTrack. Anton, are you ready to take us to the top? Yes, absolutely.
Okay, so what does ActiveTrack do and how do you make money?
I feel like it's improving how companies work. And essentially what we are doing is we've started bringing enterprise level technology to small business. And now we've learned so much about small business that's actually doing quite the opposite. We're kind of bringing drive and courage from small business to enterprise.
Interesting. And so what's a customer pay on average per month for this?
On average, they pay like 86, 87 bucks as of today. But I don't really like averages because, you know, average monthly payment is like average... body temperature for like average patient in a hospital.
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Chapter 3: What is the average customer payment for ActiveTrack?
It's pretty much tells you nothing. In our case, we have very different slices of customers and very different use cases. And those use cases, you know, some of them actually pay us about 50 bucks and we have cohorts that pay us like hundreds and thousands of dollars.
Sure. And how many customers have you scaled to today?
45, 44, 56 as of now.
I'm sorry, there was a bunch of numbers there. How many customers?
It's 4,456 customers as of now.
4,456. Correct. That's very specific. Do you listen to the show?
Yes, I've been watching. So you knew, you were ready.
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Chapter 4: How does ActiveTrack maintain low churn rates?
I knew that you would need the numbers.
Got it, okay. So 4,456 customers at 87 bucks a pop puts you about 387,000 bucks per month right now in revenue, is that right?
Actually, yeah, you're correct. Do we have some kind of cheat sheet?
No, no cheat sheet. But is that, I mean, is that accurate?
Is that accurate? We have like 378,000 bucks in MRR.
That's great. Okay. And what's growth look like? So a year ago today, what were you doing per month?
We are like, as of today, we are growing about like 60% on an annual basis, but our growth has actually accelerated. So like, you know, last year, I think it was more around 50.
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Chapter 5: What strategies does ActiveTrack use for organic growth?
And since the beginning, we were growing quite conservatively.
So Anton, the question was about a year ago today, how much were you doing? If you're growing 60% year over year?
Yeah. three million so technically we are at 4.5 million arr and we are looking to hit five and around january so like last year we were doing like around uh three if you give me exact date i can give you a precise number november 27th november 26th sorry november 1st 2017 what was arr 300, like I'm using chart mogul for this.
That's okay, so what was it, MRR?
Yeah, 365 days ago, it was 245,000.6.
And now you're 378. Yeah. That's great, healthy growth.
So we are growing like for 56% annual growth.
That's great. Have you done this bootstrapped or did you raise capital?
Yeah, it's absolutely bootstrapped.
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Chapter 6: How does ActiveTrack utilize a freemium model for customer acquisition?
That's great. Because of that, it took us quite a while. I mean, in terms of time, it's kind of funny. I've been reflecting on our numbers last month and like last month in October, we've actually added the same number of MRR numbers. as we've added in first 18 months. So it took us like a year and a half to add about 18K in MRR first as we've added last month.
That's great. What's churned today?
Depending on what kind of churn do you mean, because we kind of monitor logo churn and we monitor MRR churn.
What's MRR churn?
MRR churn, like, net MRR churn is actually negative and we are quite proud of it. So, like, earlier I brought up the fact that, you know, we started accelerating our growth about a year ago and part of the reason is because we started focusing on churn and on customer success in general. We started selling, you know,
better use cases and improve the way we sell, actually, and the way we understand customers. So now, recent several months, we actually have negative net MRR.
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Chapter 7: What is the importance of customer success in ActiveTrack's growth?
What's gross revenue churn per month?
Gross revenue churn. Just a sec. Okay. Technically, we are like about percent or like in October, it was 1.5 negative.
Yeah, but that's net. What's gross?
Churn, gross, MRR churn. It was 2% in October. It was 2% in September. It was 2.8 in August. That's great.
Okay, so about 2% gross revenue churn. And then it sounds like you're expanding each month by about 3% to get to net negative 1%.
Yeah, that's probably true.
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Chapter 8: What advice does the guest have for aspiring entrepreneurs?
And what is kind of underneath what is happening is we are technically shortening our smallest customers. So we can roughly divide our customers into groups. Small customers who are signing up for monthly plans And they stay with us for like four, five, six months. And then, you know, we have a very strong free plan.
So for them, it's always kind of like a choice of, do I really want to pay this 50 bucks a month and like collect data from five workstations? Or would I be okay if I would just switch back to a free plan and pay nothing? And they get monthly invoices. So for them, like every monthly invoice is like a point of reconsideration.
Do they want to spend 50 bucks on ActiveTrack or would they rather spend it like on HBO or like Netflix? Especially if it's a small business. Most of those guys are small businesses. They can account every penny and operate in a very frugal way. For larger companies, it's not so important. For larger companies, typically, first of all, they see analytical kind of use of the product.
Plus, they stay with us for a much longer period of time, and they buy more seeds. So those smaller guys are kind of churning, but sometimes getting back to us, and sometimes I see them getting back and forth five, six times in a row. But larger companies, like 30, 50 employees and up, they tend to stick for a really long time. And they tend to expand and buy add-ons.
So let's dive in here. Put this on a timeline for me. What year did you launch the company in?
Our first sale, our first subscription was sold in February 2012.
But when did you launch the company?
The company, like the legal entity, was incorporated by my partner in 1995. We met each other like in 2009.
When did you start writing the code?
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